Comparing the “Big 6” Consumer Tech Companies

After earnings season ends, I always like doing some comparisons between some of the largest and most important consumer technology companies to see how they measure up on key financial and operating metrics. I’ve shared some of this data with Tech.pinions Insiders once before, and I thought I’d do so again now we’re through the Q3 2015 earnings season. The charts here come from the Jackdaw Research Quarterly Decks Service. You can sign up for them here. The full deck, with about 15 charts, has gone out to subscribers today. The companies included in this comparison are Amazon, Apple, Facebook, Google, Microsoft, and Samsung. I used to include Sony, but it seems to be exiting more and more aspects of the consumer technology business so I’ve dropped them this time around. It’s also worth noting that capex figures for this quarter and employee figures for all periods aren’t available for Samsung.

Revenues – Apple is now the biggest of the big 6

The last time I did this analysis, Apple had just barely passed Samsung as the company with the highest trailing 4-quarter revenue of any of these companies and, since then, its lead has only expanded. As Samsung has suffered revenue declines due to its struggling mobile business, Apple has gone from strength to strength with its strongest period of revenue growth in years, thanks to the new iPhones. Further down the pecking order, Amazon has also now passed Microsoft, which benefited from the acquisition of Nokia’s devices business for a time but is now seeing revenue declines year on year as that business shrinks and currency effects detract from overseas performance in general:

Big 6 Revenues

As you can see, Facebook is by far the smallest of this “big 6” and is included for its outsized influence in the market and its margin performance, not for its modest financial scale.

Margins – Facebook is taking a dive

From a margin perspective, Facebook has been the leader for quite some time, but was pipped by Apple and Microsoft over the past four quarters on operating margin:

Operating margins

What’s behind the decline in Facebook’s margin? Acquisitions of new businesses such as Oculus and WhatsApp, which incur substantial costs but no revenues. At the same time, you’ll also note Google’s margins have been steadily improving, while Samsung has begun to turn its performance around in the last couple of quarters, largely thanks to its semiconductor business. And of course, Amazon comes in last place, even with its recent uptick in profitability thanks to AWS. In dollar terms, Amazon’s operating profits over four quarters continue to lag even those of Facebook, which has revenues around one sixth those of Amazon:

Operating profit

Amazon is out-hiring everyone else

As I’ve written elsewhere, Amazon is on a hiring spree at the moment, adding 72,900 employees in the past 12 months alone, significantly more employees than Google has in total:


At this point, Amazon employees around 225,000, or twice as many as either Apple or Microsoft. Apple, Google, and Facebook have been hiring significantly too, but at nothing like the rate of Amazon, while Microsoft has been laying off workers following the Nokia acquisition. Because many of Amazon’s new employees are warehouse workers, and because its revenues are growing at a much slower rate, its annual revenue per employee has been steadily falling and now sits at under $500,000, at the bottom of the pile. Meanwhile, Apple has crossed $2 million per employee in annual revenue, and Facebook passed Google sometime last year.

Very different business models drive these financials

The last thing I’ll mention here is these companies have fundamentally different business models behind their financial performance. Facebook and Google share ad-based business models, with around 90% of their revenues coming from that single source, while Apple and Samsung are most similar in that they derive the bulk of their revenue from hardware, though their execution and strategy are quite different. Amazon and Microsoft each derive the bulk of their revenues from other categories – e-commerce in the case of Amazon and software in the case of Microsoft, though both also have growing cloud businesses. The chart below shows the composition of their revenues by business:

Revenue by business model

All of this is a useful reminder there’s no single recipe for success in consumer technology and that each of these companies has achieved impressive metrics by ploughing its own unique furrow, rather than by following a single formula.

Published by

Jan Dawson

Jan Dawson is Founder and Chief Analyst at Jackdaw Research, a technology research and consulting firm focused on consumer technology. During his sixteen years as a technology analyst, Jan has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. As such, he brings a unique perspective to the consumer technology space, pulling together insights on communications and content services, device hardware and software, and online services to provide big-picture market analysis and strategic advice to his clients. Jan has worked with many of the world’s largest operators, device and infrastructure vendors, online service providers and others to shape their strategies and help them understand the market. Prior to founding Jackdaw, Jan worked at Ovum for a number of years, most recently as Chief Telecoms Analyst, responsible for Ovum’s telecoms research agenda globally.

2 thoughts on “Comparing the “Big 6” Consumer Tech Companies”

Leave a Reply

Your email address will not be published. Required fields are marked *